Is This Currency Pair Resuming the Broader Trend?

An outside day pattern for this currency pair has the market looking for an early resumption of the broader downtrend, but Kristian Kerr, of DailyFX.com, suggests that such an occurrence would be a bit ahead of schedule and explains why.

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An outside day pattern in EUR/USD Tuesday, off key Gann resistance in the 1.2835 area, has the market looking for an early resumption of the broader downtrend. Our work with cycles and other timing methods suggests that such an occurrence would be a bit ahead of schedule as a continuation of the current correction/consolidation into next week is the ideal scenario. Of course, markets rarely give us ideal so we are open to an early downside resumption, but, that said, we really need to see support at 1.2605/1.2585 give way to confirm this more immediate negative view. A move back to 1.2785 would signal the euro remains in consolidation mode, but traction over 1.2835 is really required to force any sort of meaningful final squeeze higher in the exchange rate.